SCHLATTER INDUSTRIES AG Media information
2017 financial year: Schlatter Group increases net sales and profit
Schlieren, March 20, 2018. In the 2017 financial year, the Schlatter Group (SIX Swiss Exchange: STRN) increased net sales by 11.7% to CHF 101.1 million (2016: CHF 90.5 million) and recorded order intake of CHF 94.6 million, which represents a decline on the previous year (2016: CHF 107.7 million). As at December 31, 2017, the order backlog stood at CHF 42.5 million (December 31, 2016: CHF 49.0 million). Schlatter Group is posting a positive operating result (EBIT) of CHF 2.5 million for the reporting period (2016: CHF 1.1 million). With a consolidated net result of CHF 2.9 million (2016: CHF 0.5 million), the Schlatter Group is closing the 2017 financial year with a profit that significantly outstrips the prior-year result.
The current robust health of the global economy and the major development initiatives of recent years are having a positive impact on investment sentiment among customers, and Schlatter has successfully gained market share with its newly launched products. Whereas the welding segment generated an impressive profit in the 2017 financial year, the weaving segment slipped back into the red. A significant investment programme to overhaul production in Münster was approved during the reporting period. The goal of this programme is to further improve the gross margin as well as capacity utilisation.
Welding segment
In the welding segment, net sales in the 2017 financial year rose to CHF 81.4 million (2016: CHF 69.8 million). At CHF 73.8 million, order intake fell short of the prior-year level (2016: CHF 86.7 million). The comparatively high order intake in 2016 included two major orders with a total volume of CHF 17.5 million. The order backlog at the year-end amounted to CHF 34.5 million (December 31, 2016: CHF 42.1 million). The development of a new machine platform should have the effect of reducing complexity, as well delivering a further, sustainable reduction in product costs.
Systems for the manufacture of reinforcing mesh
In the reinforcing mesh area, the largest in terms of sales, a slight recovery has taken hold in many markets around the world. Previously postponed modernisation and replacement investments on the part of customers have now been realised. Compared to the previous year, the volume of business processed almost doubled, which has accordingly led to an improvement in profitability.
The industrial groups that dominate the market are modernising their production sites, particularly in northern Europe. Schlatter has benefited from this development, winning a number of large orders over the last two years. South-east Asia shows a strong demand for flexible, highly productive and rapidly upgradeable reinforcing mesh installations. In Brazil, there is now evidence that of a slight improvement in investment sentiment among companies, and Schlatter won a number of projects in the 2017 financial year. In various Central American countries and the emerging markets generally, demand continues to be strong for high-performance machinery for standardised reinforcing mesh. In Russia, an increasing number of quotation requests are being received with the potential for conversion into future orders.
Installations for the production of industrial mesh
Schlatter once again generated numerous orders with the product families it launched a few years ago and has refined in the interim. In China, the increasing degree of automation together with an emphasis on higher quality is boosting demand for both Schlatter's reconditioned systems and for its new systems. In Russia, the market for industrial mesh production is gradually regaining some momentum. Ever since 2016, Schlatter has selectively been investing additional money and resources in the marketing of mesh production systems in markets where it previously had only a low-key presence, such as the Middle East. In 2017, the first significant sales were booked in these regions.
Installations for rail welding
Thanks to its dominant position in the global market for static rail welding equipment, Schlatter was able to maintain its market share in the 2017 financial year. In the area of mobile rail welding systems, competition is on the rise, as a number of major international groups with a comprehensive offering in the area of track superstructure are now expanding their product portfolios into mobile rail welding. In Russia, Schlatter concluded a number of sales agreements for mobile rail welding systems. Schlatter is the first Western company to homologise mobile systems in Russia, and has received state approval for Russia and the CIS countries accordingly.
Weaving segment
In the weaving segment, order intake remained unchanged at CHF 20.8 million (2016: CHF 21.0 million). At CHF 19.7 million, net sales were slightly below the level of the previous year (2016: CHF 20.7 million). As at December 31, 2017, the order backlog stood at CHF 8.0 million (December 31, 2016: CHF 6.9 million). In the 2017 financial year, net sales were primarily generated through machinery for the manufacture of paper machine clothing. The sales volume in the wire weaving machinery area accounted for some 15 percent of this segment's net sales in 2017, which represented a slight rise. Around a third of net sales at the Münster site is generated through the manufacture of parts and modules for the Schlieren site.
Despite good capacity utilisation, this segment recorded a loss in the 2017 financial year. One reason for this development is a lack of finishing machines for technical textiles, which exhibit a higher level of profitability than weaving machines. A combination of product cost-cutting measures and a higher price level for weaving machines should see this segment return to profitability in 2018.
Outlook
The global sales and innovation initiatives of recent years as well as the positive sentiment evident in the markets are giving a boost to the Schlatter Group. Schlatter is well positioned for the 2018 financial year even though operating conditions remain challenging. Following an impressively strong inflow of new orders in 2016, order intake then normalised in the 2017 financial year. A moderate rise is expected for the 2018 financial year. The marketing drive, which has included the establishment of additional sales resources in the emerging markets and the opening of a sales and service facility in China, is resulting in growing sales in these regions. The package of measures to expand the service business is likewise still being rolled out. Other areas of focus include product cost-cutting in both the welding and weaving segments. For the current 2018 financial year, the Board of Directors and Group Management are targeting an increase in consolidated profit compared to the previous year.
Annual General Meeting 2018
The Board of Directors will recommend to the General Meeting of Schlatter Industries AG on May 3, 2018, that the company should not make a dividend payment for the 2017 financial year.
The full 2017 Annual Report can be downloaded from the Schlatter Group website:
http://www.schlattergroup.com/en/investor-relations/annual_and_semester_reports/
Key figures of the Schlatter Group
2017 | 2016 | ||
Net sales | CHF million | 101.1 | 90.5 |
Change compared to previous year | % | 11.7 | 8.8 |
Operating result (EBIT) | CHF million | 2.5 | 1.1 |
in % of net sales | % | 2.5 | 1.2 |
Net result | CHF million | 2.9 | 0.5 |
in % of net sales | % | 2.8 | 0.6 |
Order intake | CHF million | 94.6 | 107.7 |
Order backlog | CHF million | 42.5 | 49.0 |
Headcount at period end | FTEs | 345 | 319 |
Average headcount | FTEs | 332 | 312 |
Net sales per employee | CHF 1,000 | 305 | 290 |
Interest-bearing liabilities | CHF million | 0.3 | 0.5 |
Net financial position (debt)1 | CHF million | 11.2 | 14.0 |
Gearing2 | % | 0.0 | 0.0 |
Free cash flow3 | CHF million | -2.9 | 11.9 |
Current assets | CHF million | 49.8 | 48.1 |
Non-current assets | CHF million | 6.3 | 7.3 |
Liabilities | CHF million | 30.7 | 33.1 |
Equity | CHF million | 25.4 | 22.3 |
Equity ratio | % | 45.3 | 40.2 |
Return on equity (ROE)4 | % | 12.1 | 2.3 |
Key share figures | |||
Share capital as of December 31 | CHF 1,000 | 17,675 | 17,675 |
Total registered shares | No. | 1,104,704 | 1,104,704 |
Registered shares entitled to dividend payments | No. | 1,104,704 | 1,104,704 |
Net result per registered share5 | CHF | 2.60 | 0.46 |
Equity per registered share5 | CHF | 23.03 | 20.17 |
Dividend per registered share | CHF | 06 | 0 |
Payout ratio | % | 06 | 0 |
Share price development | |||
High | CHF | 58.00 | 44.00 |
Low | CHF | 38.00 | 29.20 |
Year-end | CHF | 47.75 | 38.75 |
Market capitalization | |||
High | CHF million | 64.1 | 48.6 |
Low | CHF million | 42.0 | 32.3 |
Year-end | CHF million | 52.7 | 42.8 |
1 | Net financial position (debt): cash and cash equivalents less interest-bearing liabilities |
2 | Gearing: net financial position divided by equity |
3 | Cash flow from operating activites less purchase of tangible fixed assets and intangible assets, plus sale of tangible fixed assets and intangible assets |
4 | Net result divided by average equity |
5 | Determined on the basis of dividend-entitled shares |
6 | In accordance to the proposal to the Annual General Meeting of May 3, 2018 |
Further information
Schlatter Industries AG
Werner Schmidli
Chief Executive Officer
Telephone +41 44 732 71 70
Mobile +41 79 343 62 62
Fax +41 44 732 45 02
werner.schmidli@schlattergroup.com
Agenda
20.03.2018 | Publication of detailed results for the 2017 financial year (media information and publication of 2017 annual report on the company's website) |
03.05.2018 | Annual General Meeting |
21.08.2018 | Publication of 2018 half year report |
| Provider | Channel | Contact | ||
|---|---|---|---|---|
|
EQS Group Ltd., Switzerland switzerland.eqs.com |
newsbox.ch www.newsbox.ch |
Provider/Channel related enquiries cs.switzerland@eqs.com +41 41 763 00 50 |
